Delhi High Court | Section 43(5) of RERA Act Mandates Pre-Deposit for Promoter Appeals | Security in Lieu of Deposit Not Permissible | Appeals Dismissed Against REAT Orders
Safiya Malik
The High Court of Delhi Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar dismissed two appeals challenging the orders of the Real Estate Appellate Tribunal, NCT of Delhi and Union Territory of Chandigarh. The Court held that promoters are mandatorily required to comply with the statutory condition of pre-deposit under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 before an appeal can be entertained. The Court directed that appeals dismissed by the Tribunal for want of pre-deposit cannot be revived unless such deposit is made within the prescribed time.
In 2010, the appellant company, CJ Infrastructure Pvt. Ltd., acquired a freehold property located at 21, District Centre, Laxmi Nagar, Delhi. On this property, the company developed a commercial complex known as “Metroplex East,” comprising 197 units alongside common facilities such as elevators, staircases, and entrance lobbies. The company asserted that construction was completed on 14 February 2013, and a licensed architect issued a certificate declaring the premises fit for occupation.
Applications were allegedly filed with the Delhi Development Authority (DDA) on 14 February 2013, 31 October 2013, and 2 January 2014 seeking an Occupancy-cum-Completion Certificate (OCC). As no response was received, the company presumed sanction under the deemed approval provision.
Between 2013 and 2015, the appellant sold or allotted 149 units to purchasers and executed conveyance deeds in their favour. While the property market was initially buoyant, a subsequent decline led to grievances from investors. Two associations—Metroplex East Welfare Association and Metroplex East Owner Association—were later formed to represent unit holders.
In September 2015, the Metroplex East Welfare Association executed a memorandum of understanding with the appellant company to settle disputes. The company claimed compliance with obligations and denied default. Despite this, several purchasers individually petitioned under the Real Estate (Regulation and Development) Act, 2016 (RERA Act), which came into force on 1 May 2017. Their principal grievance was that no formal OCC had been obtained.
The Adjudicating Authority under RERA passed orders adverse to the company. In 2022, appeals were preferred before the Real Estate Appellate Tribunal (REAT). On 22 May 2023, REAT directed pre-deposit of the full adjudicated amount under Section 43(5) of the Act as a condition for the appeals to proceed.
The company challenged maintainability, contending the RERA Act was inapplicable since the OCC was deemed to have been granted in 2013. In parallel, the company also filed a writ petition (W.P.(C) No.1978/2022) before the High Court seeking issuance of an OCC from the DDA, which remains pending.
The REAT, however, by orders dated 27 March 2024, dismissed the appeals citing the Supreme Court’s ruling in Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh (2021) 18 SCC 127, holding that pre-deposit under Section 43(5) is mandatory. The appellant then approached the High Court challenging REAT’s dismissal.
The appellant argued that since no reply was received to its OCC applications in 2013, sanction must be deemed granted, thereby placing the project outside the purview of the RERA Act. It contended that RERA authorities lacked jurisdiction. The appellant further submitted that it offered immovable property as security in lieu of monetary deposit, which was declined by REAT.
The respondents countered that the appellant relied on fabricated stamps and receipts to claim filing of OCC applications. They noted that the fee receipt produced was from 2017, four years after the purported applications. Moreover, the fire safety certificate necessary for such applications was dated 30 October 2013, after the alleged filing.
The DDA, in a status report, confirmed the OCC application was assessed under the Unified Building Bye-Laws for Delhi, 2016, and despite repeated opportunities, shortcomings were not rectified. Consequently, the application was rejected on 8 September 2021. Respondents further argued that compliance with Section 43(5) cannot be termed onerous or violative of constitutional rights.
The Court examined the statutory scheme and records in detail. Justice Anil Kshetarpal, delivering the judgment, recorded: “At the very outset, it may be noted that the Appellants have come in Appeal primarily on the ground that the OCC was deemed granted as there was no response from the DDA. At this juncture, a bare perusal of Rule 8(ii) of Building Bye-Laws, 1883, would be appropriate.”
The Bench cited Rule 8(ii), which provides for deemed approval if no decision is taken within 60 days. However, reference was also made to provisions of the Unified Building Bye-Laws for Delhi, 2016 (Rules 2.7.10–2.7.12), which impose conditions including requisite fee deposit and compliance with statutory requirements.
“In the present case, a bare perusal of the relevant portion of the fresh status report filed on behalf of the DDA on 26.09.2024 clearly reveals that the Appellant has claimed that it allegedly applied for completion on 14.02.2013. However, the Fire Safety Certificate is of subsequent time i.e. 30.10.2013. Additionally, with respect to deposit of fee towards OCC Application, the Appellant has filed a receipt dated 20.04.2017, i.e. 4 years after the alleged application for OCC.”
The Court concluded: “Therefore, we stand fortified in our conclusion that in the facts of the present case, the OCC cannot be deemed to be granted.”
On the applicability of RERA, the Bench recorded: “It is to be noted that in light of the rejection of the OCC, whether the OCC was deemed granted or not holds no value, as the situation at the time of the filing of the Appeal before the REAT is that no OCC exists with the Appellants, therefore RERA Act will be applicable.”
Turning to Section 43(5), the Court extracted the statutory text in full and stated: “Section 43(5) of the RERA Act stipulates that a right of appeal to a promoter is pre-conditioned by the deposit of total amount to be paid to an allottee of an apartment as may have been determined by the REAT, before entertaining the appeal and it being heard by the REAT.”
Further, the Court elaborated: “It be noted here that the words ‘it shall not be entertained’ occurring in the proviso to sub-section (5) of Section 43 is a preliminary injunction. This prevents even the presentation of an appeal. The clause ‘before the said appeal is heard’ ultimately is a final injunction to the process of appellate exercise of jurisdiction.”
Discussing legislative intent, the Bench recorded: “The intent of the legislature while framing Section 43(5) was to prevent any form of exploitation, as the Promoter is in a far more dominant position financially or otherwise, and the allottee, being pitted against such dominants, requires protection of his lifetime savings in such investments.”
The Court then referred to the Supreme Court precedent: “In our considered view, the obligation cast upon the promoter of pre-deposit under Section 43(5) of the Act, being a class in itself, and the promoters who are in receipt of money which is being claimed by the homebuyers/allottees for refund and determined in the first place by the competent authority… in no circumstance can be said to be onerous as prayed for or in violation of Article 14 or Article 19(1)(g) of the Constitution of India.”
Thus, the High Court found that the REAT’s dismissal of appeals for non-compliance with pre-deposit requirement was consistent with law.
Regarding the appellant’s request to furnish immovable property as security, the Bench categorically stated: “There is no provision in the RERA Act which may enable the Appellants to furnish the security of immovable property in lieu of pre-deposit. Therefore, this Court finds no merit in the abovementioned contention as it is beyond the purview of the statute.”
The High Court concluded that there was no error in the REAT’s decision. It categorically dismissed both appeals, recording: “The upshot of the discussion is that we find no error in the judgment impugned in the instant Appeals. Consequently, both Appeals are dismissed in the above terms. Pending application CM 25924/2024, stands disposed of.”
However, the Court carved out a limited relief: “We make it clear that if any of the Appellant intends to revive the appeals before the REAT against the order of the RERA AA, it may apply within 30 days from the date of this order, provided the Appellants comply with the condition of pre-deposit as contemplated under the proviso to Section 43(5) of RERA Act which may be decided by the Tribunal on its own merits in accordance with law. No costs.”
Advocates Representing the Parties
For the Petitioners: Sh. Mandeep Singh Vinaik, Mr. S.K. Sagar, and Mr. Gaikhuanlung, Advocates.
For the Respondents: Mr. Siddharth Panda, Advocate; Mr. A. S. Chandhiok, Senior Advocate, along with Ms. Chakshu Thakral, Mr. Amarjit Singh Bedi, Ms. Riya Seth, and Mr. Varun Chandhiok, Advocates ; Ms. Mansi Bajaj and Ms. Nidhi Tyagi, Advocates
Case Title: CJ Infrastructure Pvt. Ltd. & Anr. v. Real Estate Appellate Tribunal for NCT of Delhi and UT Chandigarh & Ors.
Neutral Citation: 2025: DHC: 7476 - DB
Case Number: RERA Appeal 5/2024 and RERA Appeal 6/2024
Bench: Justice Anil Kshetarpal, Justice Harish Vaidyanathan Shankar
